Non-use applications set to become more popular
A recently decided case in the Federal Court, Health World Limited v Shin-Sun Australia Pty Ltd [2008] FCA 100, amongst other things, highlighted that a recent amendment to the Trade Marks Act 1995 (the Act) removing the requirement that an applicant in a non-use application be an “aggrieved person”, has made it easier to succeed in a non-use application.
Background to the Case
Health World Limited (Health World) had registered in 1996 the words ‘Inner Health’ in respect of ‘pharmaceutical preparations included in this class, including such preparations for promoting the growth and adherence of beneficial intestinal bacteria in humans being goods in class 5’. It successfully marketed a probiotic powder called Inner Health Powder (the Powder). Health World subsequently commenced developing Inner Health Plus Capsules (the Capsules) and applied to register the word mark ‘Inner Health Plus’ on 12 September 2001. In the meantime, Shin-Sun Australia Pty Ltd (Shin-Sun) registered ‘HealthPlus’ in respect of ‘pharmaceutical products including vitamins and dietary supplements’ in class 5 with a priority date of 7 May 2001.
In December 2001, Health World opposed the registration of the ‘HealthPlus’ mark relying on the s60 ground. The Registrar dismissed the opposition and Health World failed on appeal to the Federal Court: Health World Limited v Shin-Sun Australia Pty Ltd [2005] FCA 5; (2005) 64 IPR 495. Following that, in Health World Limited v Shin-Sun Australia Pty Ltd [2006] FCA 647 it was held that the ‘HealthPlus’ mark was not deceptively similar to the ‘Inner Health Plus’ mark.
The Decision
In this proceeding, there were three separate applications before the court:
1. a rectification proceeding by Health World that sought expungement by Shin-Sun of the HealthPlus mark under ss 88(2)(a) and (c) of the Act;
2. a non-use proceeding by Health World that sought removal of Shin-Sun’s HealthPlus trade mark from the register on the grounds of non-use in s 92(4)(a) and s 92(4)(b) of the Act; and
3. a non-use application by Shin-Sun against Health World’s ‘Inner Health Plus’ mark, also relying on the grounds stated in s 92(4)(a) and s 92(4)(b) of the Act.
The rectification proceeding
By s 88(2)(a) an application for cancellation or removal of a mark may be made on any of the grounds on which the registration of the trade mark could have been opposed. The grounds relied on by Health World, as well as the Courts finding on each, are summarised below:
Under s 42 Health World argued that use of the ‘HealthPlus’ mark was contrary to law because it was misleading or deceptive under s 52 of the Trade Practices Act 1974 (Cth). Health World relied on their reputation under the ‘Inner Health Plus’ brand to establish this ground. The Court acknowledged that at the crux of this question was whether the reputation of the ‘Inner Health Plus’ Capsule was separate and distinct from the reputation of the Inner Health Powder. After a detailed analysis of Health World’s marketing and promotion of the Capsules the Court rejected their submissions on this point:
“the entire thrust of Health World ’s launch of the Inner Health Plus Capsules was to take advantage of the reputation of the Inner Health Powder and the goodwill attaching to it” and “the essential message and reputation of Inner Health Plus remained constant”.
Since Health World’s reputation was specifically linked back to their initial product, the Powder, there could be no misleading or deceptive behaviour by Shin Sun.
Under s 59 Health World argued that on filing Shin Sun did not intend to use, or authorize to use, the 'HealthPlus' mark in Australia. Health World’s evidence pointed to Shin-Sun’s, as well an associated company, Nature’s Hive Pty Ltd, failure to distinguish between the separate identities of those corporations. The Court accepted their submissions on this point and found that the relevant intention for a connection in the course of trade was between Nature’s Hive and the goods, as opposed to with Shin-Sun. As such, the requisite intention was not present.
However, this ground proceeded to fail since Health World were found not to have standing as a ‘person aggrieved’ as required by s 88(1). The Court said “the applicant [must] have a desire to use the mark, or be likely to be hampered in some other way by the registration of the mark that the applicant seeks to have expunged”. The court did not find any intention on behalf of Health World to use the ‘HealthPlus’ mark other than as part of its existing ‘Inner Health Plus’ mark. A finding of no deceptive similarity between ‘Inner Health Plus’ and HealthPlus’ meant that Health World had no standing.
Health World also relied on s 60 as a basis for removal of Shin-Suns “HealthPlus’ mark. On this point, there was a dispute between the parties as to whether s 60 applied in its form as at May 2001 (the relevant date for which the application could have been opposed) or in the form in which it stands at present (as amended on 23 October 2006). Shin-Sun argued that the pre-amended provision applied thus requiring Health World to establish that the marks in question were “substantially identical or deceptively similar”. Health World made submissions to the contrary arguing that the Amendment Act, contains no transitional provision for the application of the amendment to s 60.
The Court found that s 60 applied in its pre-amended form: “it would seem to me to be wrong to suggest that the Act contemplates that an expungement application may be brought upon the basis of a ground of opposition expressed in different terms from those that were applicable when the opposition was, or could have been, brought”.
Regardless, this ground proceeded to fail due to a lack of requisite reputation, as well as a finding against deceptive similarity between “Inner Health Plus’ and ‘HealthPlus’.
Health World’s non-use proceeding
Health World’s non-use application relied principally on the failure of Shin-Sun to use the HealthPlus trade mark in Australia during the three year period following its filing.
The court found in favour of Health World predominantly on the basis that it was Nature’s Hive that used the mark during the relevant period and at all other times.
However, s 92 in the form in which it stood when Health World filed its non-use application required a person bringing a non-use application be a person aggrieved. For the same reasons mentioned above the Court did not consider that Heath World was such a person. The application failed.
Shin-Sun’s non-use proceeding
Shin-Sun sought partial removal of Health World’s ‘Inner Health Plus’ mark.
The Court did not agree with Shin-Sun that on the day on which the application was made that Health World had no intention to use the mark in relation to all the goods covered in the application (Shin-Sun’s application under s 92(4)(a) failed)
Shin-Sun were successful under s 92(4)(b)in establishing that during at least a three year period, Heath World had only used the trade mark in relation to some of the goods claimed, the Capsules.
However, again, at the time Shin-Sun filed their non-use application,s 92 required the applicant be a person aggrieved. On this point the Court said;
“Shin-Sun does not suggest that it intends to use the Inner Health Plus mark to identify any of its goods. Nor has Shin-Sun established that if Health World were to use the Inner Health Plus mark to identify goods in class 5, other than probiotic products, the mark would be deceptively similar to the Health Plus mark"
Accordingly, it was held that Shin-Sun was not a person aggrieved and that the application must fail.
Interestingly, under the law as it currently stands the non-use applications brought by both parties under s 92 of the Act in this case may well have succeeded. On that basis, non-use applications may well become more popular.
